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Categories: Thought Leadership3.9 min read

Extended Planning: Sales Performance Management

This week we are pleased to welcome one of our valued Jedox Partners in the USA as a guest to the Jedox Blog. Headquartered on the West Coast, Spectrum Technologies shares their unique insights on a fast-growing sector of enterprise performance management in our new 2-part series.

Sales Performance Management is defined as a set of operational and analytical process to help align selling resources with business priorities. This includes encompassing territory planning, quota planning, calculation of sales compensation, publishing commission statements, sales forecasting, commission accruals, management reports and analytics. There are a handful of niche Sales Performance Management software products available on the market, most have been around for more than a decade.

The key benefits of Sales Performance Management automation are:

  • Savings of 3% to 5% in sales compensation expenses & over payments
  • Ability to rollout complex compensation plans to best align sales behavior with business goals
  • Data-driven analytics to speed up decisions and actions
  • Reduced operational costs in administering various Sales Performance Management functions

According to Gartner’s 2020 Sales Performance Management report, 40% of B2B companies with over 100 salespeople will have an Sales Performance Management solution in place by 2022. Clearly, the market adoption for Sales Performance Management software is nowhere close to what we see for CRM or ERP software. In our opinion, the primary reason for this lukewarm adoption rate is that Sales Performance Management processes and business requirements vary significantly from one company to the other, even within the same industry. Implementation of existing Sales Performance Management software takes too much time and resources, jeopardizing the short-term ROI and posing long-term risks as business strategy changes over time.

Key Challenges with Current Sales Performance Management Solutions

Fixed Data Model

Current Sales Performance Management tools are built with somewhat static pre-determined data model as core part of the system architecture. The customer is required to align the processes and data with the tool. While the tables in the data model are customizable to customer needs, the underlying process flow cannot be changed without significant customization.  The approach works very well when business processes are standardized and static i.e. not expected to change over time. With these systems, business users must understand and adopt a new paradigm of how information flows within the prefabricated data model.

Rigid Data Integration

With most Sales Performance Management solutions, data integration means providing transactional and organizational data in a pre-defined format as specified by the tool. This requires heavy IT involvement to get the data ready from the source system.  Moreover, if the data needs preprocessing, or manual updates, these systems have limited capabilities. For example, contract data coming in from a CRM system needs to be augmented with the tribal knowledge available to sales admins for sales compensation purposes. In such situations, when the incoming data is not completely clean and ready (as is often the case) the data landscape poses a foundational challenge for Sales Performance Management automation.

Complex Rule Building

Most Sales Performance Management tools on the market are perfectly capable of handling complex sales commission rules and compensation processes. However, updates to these rules must be made by skilled and highly trained consultants. Even experienced commission administrators with above average data skills struggle with this issue. Over time, as business users make seemingly simple changes without a true understanding of the implications, these systems become a maintenance nightmare.

Limited Reporting Capabilities

Sales Performance Management tools often come with set of “out of the box” reports and dashboards, and the option to build more custom reports. But most of these do not come with a comprehensive and state of the art report building platform. For management reporting, admin users extract data out of an Sales Performance Management tool into more robust reporting tools. Moreover, ad-hoc analysis of the data is either not available or very difficult.

How an EPM solution supports Sales Performance Management automation

An EPM software with a foundation in state-of-the-art technology such as Jedox lends itself very well to Sales Performance Management automation. Leveraging Spectrum’s capabilities and two decades of experience in Sales Performance Management, we built a Sales Compensation Model in Jedox to help automate sales compensation processes. It is used primarily for commission calculation, reporting, and management dashboards.

Spectrum Technologies

Spectrum is a Jedox Partner based in the United States and industry-leading expert in Sales Performance Management Services. Their Sales Performance Management Services group is composed of a highly skilled team of professionals who are 100% dedicated to SPM. They can address diverse challenges such as creating environments that enable better sales forecasting, ensuring fewer commission disputes, delivering more accurate payments, providing full compliance, and increasing security functionality.

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